What would be the effect on the customer financing experience if we can reduce the time it takes to fund a transaction from 5 days to 5 hours? A lofty goal considering the legacy financing processes that exist in the industry. But, as you business owners know, with lofty goals come lofty results when you are willing to think outside the box.
That’s just what we did in launching RapidFund – the only electronic transaction system in the leasing industry.
A common challenge in the equipment leasing industry is speed. In our 15 years helping business owners get the capital and equipment they need, there has always been at least one consistent theme – the business owner wants a straight and unobstructed route from deciding they need the equipment to making the purchase. Financing however, for the most part, has caused friction during this process.
When a small business owner wants to invest in their business by buying a piece of equipment the last thing they want to worry about is how long the financing will take. Once that decision has been made, as far as the business is concerned, they are losing money for each day they don’t have the equipment.
For vendors that sell equipment that requires financing for most customers, the financing process adds a layer of complexity that can result in delayed delivery times, increased need for coordination, extended sales cycles, and more time for something to come up that could jeopardize the sale.
The Financing Company
Whether it is a bank, leasing company or other financing vehicle, financing equipment has been done essentially the same way for a very long time. And, in a lot of ways, has gotten much more complicated and time consuming. The longer it takes a lender to get their money out into the hands of the borrower, the longer it takes for the lender to begin generating revenue on the lease or loan.
The lesson for all parties involved is something that business owners have known all along – time equals money. The more friction there is in a transaction the less efficient it will be – and inefficiency is costly.
Direct Capital decided to do something game changing.
We’ve implemented an electronic documentation system – the first of it’s kind in the equipment leasing industry. It used to be common to take 5 days or longer to shuffle documents back and forth between the lender, vendor and customer and get the equipment in the customer hands. Now 5 hours has become common.
Besides drastically decreasing the time it takes to get funds to the vendor and the equipment to the customer, our new electronic documentation system also reduces errors and limits fraud. All of these money and time saving things mean a better customer experience. And at the end of the day, that’s what it’s really all about.
Photo credit to mai05 at http://www.sxc.hu/photo/456070